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8-K - CURRENT REPORT OF MATERIAL EVENTS OR CORPORATE CHANGES - PLAINS ALL AMERICAN PIPELINE LPa13-17561_18k.htm

Exhibit 99.1

 

 

FOR IMMEDIATE RELEASE

 

Plains All American Pipeline, L.P. Reports

Second-Quarter 2013 Results

 

(Houston — August 5, 2013) Plains All American Pipeline, L.P. (NYSE: PAA) reported second-quarter 2013 results as summarized below:

 

Summary Financial Information (1)

(in millions, except per unit data)

 

 

 

Three Months Ended
June 30,

 

%

 

 

Six Months Ended
June 30,

 

%

 

 

 

2013

 

2012

 

Change

 

 

2013

 

2012

 

Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to Plains

 

$

292

 

$

378

 

-23%

 

 

$

821

 

$

609

 

35%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted net income per limited partner unit

 

$

0.57

 

$

0.93

 

-39%

 

 

$

1.84

 

$

1.44

 

28%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA

 

$

484

 

$

557

 

-13%

 

 

$

1,232

 

$

940

 

31%

 

 

 

 

Three Months Ended
June 30,

 

%

 

 

Six Months Ended
June 30,

 

%

 

 

 

2013

 

2012

 

Change

 

 

2013

 

2012

 

Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted net income attributable to Plains

 

$

287

 

$

343

 

-16%

 

 

$

811

 

$

663

 

22%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted adjusted net income per limited partner unit

 

$

0.56

 

$

0.82

 

-32%

 

 

$

1.82

 

$

1.61

 

13%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

 

$

478

 

$

522

 

-8%

 

 

$

1,217

 

$

995

 

22%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Distribution declared for the period

 

$

0.5875

 

$

0.5325

 

10.3%

 

 

 

 

 

 

 

 

 


(1)    The Partnership’s reported results include the impact of items that affect comparability between reporting periods. The impact of these items is excluded from adjusted results. See the section of this release entitled “Non-GAAP Financial Measures and Selected Items Impacting Comparability” and the tables attached hereto for information regarding selected items that the Partnership believes impact comparability of financial results between reporting periods, as well as for information regarding non-GAAP financial measures (such as adjusted EBITDA) and their reconciliation to the most directly comparable GAAP measures.

 

 

-more-

333 Clay Street, Suite 1600

Houston, Texas 77002

713-646-4100 / 800-564-3036

 



 

Page 2

 

“PAA delivered solid second-quarter results, exceeding the high-end of our guidance and in line with our updated outlook provided in late May,” said Greg L. Armstrong, Chairman and CEO of Plains All American. “These results include an approximate $25 million adverse impact associated with certain operational issues that occurred during the second quarter of 2013.

 

“This performance was driven by continued strong fundamentals and favorable market conditions, albeit less favorable than experienced during the first quarter of 2013 or the second quarter of 2012.  We have increased the midpoint of our 2013 adjusted EBITDA guidance by $30 million to $2.19 billion, incorporating our strong performance to date and an assumed return to baseline performance levels in our Supply and Logistics segment in the second half of the year.

 

“We have performed well thus far this year and we are on track to achieve our 2013 goals.  Our distribution payable next week represents a 10.3% increase over our distribution paid in August 2012, which is consistent with our 2013 target of 9 to 10% year-over-year distribution growth, and we expect distribution coverage for 2013 to exceed 130%.  We have increased our expansion capital program by $200 million to $1.6 billion and continue to advance our multi-billion dollar project portfolio.  Furthermore, PAA remains financially well-positioned, ending the quarter with a strong balance sheet, favorable credit metrics compared to our targets, and approximately $2.6 billion in committed liquidity.”

 

The following table summarizes selected financial information by segment for the second quarter and first half of 2013:

 

Summary of Selected Financial Data by Segment (1)

(in millions)

 

 

 

Three Months Ended
June 30, 2013

 

 

Three Months Ended
June 30, 2012

 

 

 

Transportation

 

Facilities

 

Supply and
Logistics

 

 

Transportation

 

Facilities

 

Supply and
Logistics

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported segment profit

 

$

160

 

$

149

 

$

176

 

 

$

169

 

$

114

 

$

274

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selected items impacting the comparability of segment profit (2)

 

7

 

4

 

(22

)

 

11

 

5

 

(53

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted segment profit

 

$

167

 

$

153

 

$

154

 

 

$

180

 

$

119

 

$

221

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Percentage change in adjusted segment profit versus 2012 period

 

-7

%

29

%

-30

%

 

 

 

 

 

 

 

 

 

 

Six Months Ended

 

 

Six Months Ended

 

 

 

June 30, 2013

 

 

June 30, 2012

 

 

 

Transportation

 

Facilities

 

Supply and
Logistics

 

 

Transportation

 

Facilities

 

Supply and
Logistics

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported segment profit

 

$

323

 

$

300

 

$

610

 

 

$

332

 

$

204

 

$

402

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selected items impacting the comparability of segment profit (2)

 

18

 

10

 

(49

)

 

21

 

15

 

17

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted segment profit

 

$

341

 

$

310

 

$

561

 

 

$

353

 

$

219

 

$

419

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Percentage change in adjusted segment profit versus 2012 period

 

-3

%

42

%

34

%

 

 

 

 

 

 

 

 


(1)    The Partnership’s reported results include the impact of items that affect comparability between reporting periods. The impact of these items is excluded from adjusted results. See the section of this release entitled “Non-GAAP Financial Measures and Selected Items Impacting Comparability” and the tables attached hereto for information regarding selected items that the Partnership believes impact comparability of financial results between reporting periods.

(2)   Certain of our non-GAAP financial measures may not be impacted by each of the selected items impacting comparability.

 

 

-more-

333 Clay Street, Suite 1600

Houston, Texas 77002

713-646-4100 / 800-564-3036

 



 

Page 3

 

Second-quarter 2013 Transportation adjusted segment profit decreased 7% versus comparable 2012 results.  This decrease was driven by lost revenue and incremental expenses related to operational issues that occurred during the second quarter of 2013.  This impact was partially offset by the benefit of increased volumes from increased producer drilling activities and recently completed organic growth projects.

 

Second-quarter 2013 Facilities adjusted segment profit increased 29% over comparable 2012 results.  This increase was primarily related to the benefit of a recently completed crude oil rail acquisition and rail-related organic growth projects as well as increased profitability from NGL fractionation and gas processing activities.

 

Second-quarter 2013 Supply and Logistics adjusted segment profit exceeded our guidance, but represented a 30% decrease relative to comparable 2012 results.  This decrease was primarily related to relatively less favorable crude oil market conditions, particularly narrower crude oil  differentials, partially offset by higher net margins in the NGL business.

 

The Partnership will hold a conference call on August 6, 2013 (see details below).  Prior to this conference call, the Partnership will furnish a current report on Form 8-K, which will include material in this news release as well as financial and operational guidance for the third quarter and full year of 2013.  A copy of the Form 8-K will be available on the Partnership’s website at www.paalp.com, where PAA routinely posts important information about the Partnership.

 

Conference Call

 

The Partnership’s conference call will be held at 11:00 a.m. EDT on Tuesday, August 6, 2013 to discuss the following items:

 

1.              The Partnership’s second-quarter 2013 performance;

 

2.              The status of major expansion projects;

 

3.              Capitalization and liquidity;

 

4.              Financial and operating guidance for the third quarter and full year of 2013; and

 

5.              The Partnership’s outlook for the future.

 

 

-more-

333 Clay Street, Suite 1600

Houston, Texas 77002

713-646-4100 / 800-564-3036

 



 

Page 4

 

Conference Call Access Instructions

 

To access the Internet webcast of the conference call, please go to the Partnership’s website at www.paalp.com, choose “Investor Relations,” and then choose “Conference Calls.”  Following the live webcast, the call will be archived for a period of sixty (60) days on the Partnership’s website.

 

Alternatively, access to the live conference call is available by dialing toll free (888) 276-0010. International callers should dial (612) 332-1210. No password is required. The slide presentation accompanying the conference call will be available a few minutes prior to the call under the “Conference Call Summaries” portion of the “Conference Calls” tab of the “Investor Relations” section of the PAA website at www.paalp.com.

 

Telephonic Replay Instructions

 

To listen to a telephonic replay of the conference call, please dial (800) 475-6701 or (320) 365-3844 for international callers and enter replay access code 295443.  The replay will be available beginning Tuesday, August 6, 2013, at approximately 1:00 p.m. EDT and will continue until 12:59 a.m. EDT on September 7, 2013.

 

Non-GAAP Financial Measures and Selected Items Impacting Comparability

 

To supplement our financial information presented in accordance with GAAP, management uses additional measures that are known as “non-GAAP financial measures” (such as adjusted EBITDA and implied distributable cash flow) in its evaluation of past performance and prospects for the future. Management believes that the presentation of such additional financial measures provides useful information to investors regarding our performance and results of operations because these measures, when used in conjunction with related GAAP financial measures, (i) provide additional information about our core operating performance and ability to generate and distribute cash flow, (ii) provide investors with the financial analytical framework upon which management bases financial, operational, compensation and planning decisions and (iii) present measurements that investors, rating agencies and debt holders have indicated are useful in assessing us and our results of operations. These measures may exclude, for example, (i) charges for obligations that are expected to be settled with the issuance of equity instruments, (ii) the mark-to-market of derivative instruments that are related to underlying activities in another period (or the reversal of such adjustments from a prior period), (iii) items that are not indicative of our core operating results and business outlook and/or (iv) other items that we believe should be excluded in understanding our core operating performance. We have defined all such items as “selected items impacting comparability.”  We consider an understanding of these selected items impacting comparability to be material to the evaluation of our operating results and prospects.

 

Although we present selected items that we consider in evaluating our performance, you should also be aware that the items presented do not represent all items that affect comparability between the periods presented. Variations in our operating results are also caused by changes in volumes, prices, exchange rates, mechanical interruptions, acquisitions and numerous other factors. These types of variations are not separately identified in this release, but will be discussed, as applicable, in management’s discussion and analysis of operating results in our Quarterly Report on Form 10-Q.

 

Adjusted EBITDA and other non-GAAP financial measures are reconciled to the most comparable GAAP measures for the periods presented in the tables attached to this release, and should be viewed in addition to, and not in lieu of, our consolidated financial statements and notes thereto. In addition, the Partnership maintains on its website (www.paalp.com) a reconciliation of adjusted EBITDA and certain commonly used non-GAAP financial information to the most comparable GAAP measures. To access the information, investors should click on the “Investor Relations” link on the Partnership’s home page and then the “Non-GAAP Reconciliation” link on the Investor Relations page.

 

-more-

333 Clay Street, Suite 1600

Houston, Texas 77002

713-646-4100 / 800-564-3036

 



 

Page 5

 

Forward Looking Statements

 

Except for the historical information contained herein, the matters discussed in this release are forward-looking statements that involve certain risks and uncertainties that could cause actual results to differ materially from results anticipated in the forward-looking statements. These risks and uncertainties include, among other things, failure to implement or capitalize, or delays in implementing or capitalizing, on planned internal growth projects; unanticipated changes in crude oil market structure, grade differentials and volatility (or lack thereof); the successful integration and future performance of acquired assets or businesses and the risks associated with operating in lines of business that are distinct and separate from our historical operations; the occurrence of a natural disaster, catastrophe, terrorist attack or other event, including attacks on our electronic and computer systems; tightened capital markets or other factors that increase our cost of capital or limit our access to capital;  maintenance of our credit rating and ability to receive open credit from our suppliers and trade counterparties; continued creditworthiness of, and performance by, our counterparties, including financial institutions and trading companies with which we do business; the effectiveness of our risk management activities; environmental liabilities or events that are not covered by an indemnity, insurance or existing reserves; declines in the volumes of crude oil, refined product and NGL shipped, processed, purchased, stored, fractionated and/or gathered at or through the use of our facilities, whether due to declines in production from existing oil and gas reserves, failure to develop or slowdown in the development of additional oil and gas reserves or other factors; shortages or cost increases of supplies, materials or labor; fluctuations in refinery capacity in areas supplied by our mainlines and other factors affecting demand for various grades of crude oil, refined products and natural gas and resulting changes in pricing conditions or transportation throughput requirements; the availability of, and our ability to consummate, acquisition or combination opportunities; our ability to obtain debt or equity financing on satisfactory terms to fund additional acquisitions, expansion projects, working capital requirements and the repayment or refinancing of indebtedness; the impact of current and future laws, rulings, governmental regulations, accounting standards and statements and related interpretations; non-utilization of our assets and facilities; the effects of competition; interruptions in service on third-party pipelines; increased costs or lack of availability of insurance; fluctuations in the debt and equity markets, including the price of our units at the time of vesting under our long-term incentive plans; the currency exchange rate of the Canadian dollar; weather interference with business operations or project construction; risks related to the development and operation of our facilities; factors affecting demand for natural gas and natural gas storage services and rates; general economic, market or business conditions and the amplification of other risks caused by volatile financial markets, capital constraints and pervasive liquidity concerns; and other factors and uncertainties inherent in the transportation, storage, terminalling and marketing of crude oil and refined products, as well as in the storage of natural gas and the processing, transportation, fractionation, storage and marketing of natural gas liquids discussed in the Partnership’s filings with the Securities and Exchange Commission.

 

Plains All American Pipeline, L.P. is a publicly traded master limited partnership engaged in the transportation, storage, terminalling and marketing of crude oil and refined products, as well as in the processing, transportation, fractionation, storage and marketing of natural gas liquids. Through its general partner interest and majority equity ownership position in PAA Natural Gas Storage, L.P. (NYSE: PNG), PAA also owns and operates natural gas storage facilities. PAA is headquartered in Houston, Texas.

 

-more-

333 Clay Street, Suite 1600

Houston, Texas 77002

713-646-4100 / 800-564-3036

 



 

Page 6

 

PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES

FINANCIAL SUMMARY (unaudited)

 

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in millions, except per unit data)

 

 

 

Three Months Ended
June 30,

 

Six Months Ended
June 30,

 

 

 

2013

 

2012

 

2013

 

2012

 

 

 

 

 

 

 

 

 

 

 

REVENUES

 

$

10,295

 

$

9,786

 

$

20,915

 

$

19,004

 

 

 

 

 

 

 

 

 

 

 

COSTS AND EXPENSES

 

 

 

 

 

 

 

 

 

Purchases and related costs

 

9,387

 

8,830

 

18,825

 

17,332

 

Field operating costs

 

343

 

319

 

684

 

568

 

General and administrative expenses

 

91

 

89

 

196

 

182

 

Depreciation and amortization

 

91

 

86

 

173

 

146

 

Total costs and expenses

 

9,912

 

9,324

 

19,878

 

18,228

 

 

 

 

 

 

 

 

 

 

 

OPERATING INCOME

 

383

 

462

 

1,037

 

776

 

 

 

 

 

 

 

 

 

 

 

OTHER INCOME/(EXPENSE)

 

 

 

 

 

 

 

 

 

Equity earnings in unconsolidated entities

 

11

 

9

 

23

 

16

 

Interest expense, net

 

(75

)

(75

)

(152

)

(140

)

Other income/(expense), net

 

(1

)

 

(1

)

2

 

 

 

 

 

 

 

 

 

 

 

INCOME BEFORE TAX

 

318

 

396

 

907

 

654

 

Current income tax expense

 

(8

)

(6

)

(53

)

(23

)

Deferred income tax expense

 

(10

)

(4

)

(17

)

(7

)

 

 

 

 

 

 

 

 

 

 

NET INCOME

 

300

 

386

 

837

 

624

 

Net income attributable to noncontrolling interests

 

(8

)

(8

)

(16

)

(15

)

NET INCOME ATTRIBUTABLE TO PLAINS

 

$

292

 

$

378

 

$

821

 

$

609

 

 

 

 

 

 

 

 

 

 

 

NET INCOME ATTRIBUTABLE TO PLAINS:

 

 

 

 

 

 

 

 

 

LIMITED PARTNERS

 

$

197

 

$

303

 

$

631

 

$

465

 

GENERAL PARTNER

 

$

95

 

$

75

 

$

190

 

$

144

 

 

 

 

 

 

 

 

 

 

 

BASIC NET INCOME PER LIMITED PARTNER UNIT

 

$

0.58

 

$

0.93

 

$

1.85

 

$

1.45

 

 

 

 

 

 

 

 

 

 

 

DILUTED NET INCOME PER LIMITED PARTNER UNIT

 

$

0.57

 

$

0.93

 

$

1.84

 

$

1.44

 

 

 

 

 

 

 

 

 

 

 

BASIC WEIGHTED AVERAGE UNITS OUTSTANDING

 

340

 

323

 

338

 

319

 

 

 

 

 

 

 

 

 

 

 

DILUTED WEIGHTED AVERAGE UNITS OUTSTANDING

 

342

 

326

 

341

 

321

 

 

 

ADJUSTED RESULTS:

(in millions, except per unit data)

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

June 30,

 

June 30,

 

 

 

2013

 

2012

 

2013

 

2012

 

 

 

 

 

 

 

 

 

 

 

ADJUSTED NET INCOME ATTRIBUTABLE TO PLAINS

 

$

287

 

$

343

 

$

811

 

$

663

 

 

 

 

 

 

 

 

 

 

 

DILUTED ADJUSTED NET INCOME PER LIMITED PARTNER UNIT

 

$

0.56

 

$

0.82

 

$

1.82

 

$

1.61

 

 

 

 

 

 

 

 

 

 

 

ADJUSTED EBITDA

 

$

478

 

$

522

 

$

1,217

 

$

995

 

 

-more-

333 Clay Street, Suite 1600

Houston, Texas 77002

713-646-4100 / 800-564-3036

 



 

Page 7

 

PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES

FINANCIAL SUMMARY (unaudited)

 

CONDENSED CONSOLIDATED BALANCE SHEET DATA

(in millions)

 

 

 

June 30,

 

December 31,

 

 

 

2013

 

2012

 

ASSETS

 

 

 

 

 

Current assets

 

$

4,841

 

$

5,147

 

Property and equipment, net

 

10,181

 

9,643

 

Goodwill

 

2,503

 

2,535

 

Linefill and base gas

 

707

 

707

 

Long-term inventory

 

207

 

274

 

Investments in unconsolidated entities

 

442

 

343

 

Other, net

 

543

 

586

 

Total assets

 

$

19,424

 

$

19,235

 

 

 

 

 

 

 

LIABILITIES AND PARTNERS’ CAPITAL

 

 

 

 

 

Current liabilities

 

$

4,924

 

$

5,183

 

Senior notes, net of unamortized discount

 

6,011

 

6,010

 

Long-term debt under credit facilities and other

 

302

 

310

 

Other long-term liabilities and deferred credits

 

558

 

586

 

Total liabilities

 

11,795

 

12,089

 

 

 

 

 

 

 

Partners’ capital excluding noncontrolling interests

 

7,098

 

6,637

 

Noncontrolling interests

 

531

 

509

 

Total partners’ capital

 

7,629

 

7,146

 

Total liabilities and partners’ capital

 

$

19,424

 

$

19,235

 

 

DEBT CAPITALIZATION RATIOS

(in millions)

 

 

 

June 30,

 

December 31,

 

 

 

2013

 

2012

 

Short-term debt

 

$

902

 

$

1,086

 

Long-term debt

 

6,313

 

6,320

 

Total debt

 

$

7,215

 

$

7,406

 

 

 

 

 

 

 

Long-term debt

 

$

6,313

 

$

6,320

 

Partners’ capital

 

7,629

 

7,146

 

Total book capitalization

 

$

13,942

 

$

13,466

 

Total book capitalization, including short-term debt

 

$

14,844

 

$

14,552

 

 

 

 

 

 

 

Long-term debt-to-total book capitalization

 

45

%

47

%

Total debt-to-total book capitalization, including short-term debt

 

49

%

51

%

 

-more-

333 Clay Street, Suite 1600

Houston, Texas 77002

713-646-4100 / 800-564-3036

 



 

Page 8

 

PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES

FINANCIAL SUMMARY (unaudited)

 

SELECTED FINANCIAL DATA BY SEGMENT

(in millions)

 

 

 

Three Months Ended
June 30, 2013

 

Three Months Ended
June 30, 2012

 

 

 

 

 

 

 

Supply and

 

 

 

 

 

Supply and

 

 

 

Transportation

 

Facilities

 

Logistics

 

Transportation

 

Facilities

 

Logistics

 

Revenues (1)

 

$

365

 

$

348

 

$

9,934

 

 

$

361

 

$

287

 

$

9,442

 

Purchases and related costs (1)

 

(39

)

(83

)

(9,614

)

 

(35

)

(65

)

(9,030

)

Field operating costs (excluding equity-indexed compensation expense) (1)

 

(138

)

(94

)

(109

)

 

(128

)

(86

)

(105

)

Equity-indexed compensation expense - operations

 

(4

)

 

(1

)

 

(3

)

 

(1

)

Segment G&A expenses (excluding equity-indexed compensation expense) (2)

 

(26

)

(16

)

(27

)

 

(28

)

(18

)

(27

)

Equity-indexed compensation expense - general and administrative

 

(9

)

(6

)

(7

)

 

(7

)

(4

)

(5

)

Equity earnings in unconsolidated entities

 

11

 

 

 

 

9

 

 

 

Reported segment profit

 

$

160

 

$

149

 

$

176

 

 

$

169

 

$

114

 

$

274

 

Selected items impacting comparability of segment profit (3)

 

7

 

4

 

(22

)

 

11

 

5

 

(53

)

Segment profit excluding selected items impacting comparability

 

$

167

 

$

153

 

$

154

 

 

$

180

 

$

119

 

$

221

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Maintenance capital

 

$

23

 

$

11

 

$

5

 

 

$

27

 

$

10

 

$

3

 

 

 

 

Six Months Ended
June 30, 2013

 

Six Months Ended
June 30, 2012

 

 

 

 

 

 

 

Supply and

 

 

 

 

 

Supply and

 

 

 

Transportation

 

Facilities

 

Logistics

 

Transportation

 

Facilities

 

Logistics

 

Revenues (1)

 

$

732

 

$

703

 

$

20,158

 

 

$

678

 

$

523

 

$

18,319

 

Purchases and related costs (1)

 

(74

)

(174

)

(19,249

)

 

(63

)

(139

)

(17,638

)

Field operating costs (excluding equity-indexed compensation expense) (1)

 

(270

)

(180

)

(224

)

 

(224

)

(133

)

(207

)

Equity-indexed compensation expense - operations

 

(13

)

(1

)

(2

)

 

(10

)

(1

)

(1

)

Segment G&A expenses (excluding equity-indexed compensation expense) (2)

 

(49

)

(32

)

(53

)

 

(49

)

(32

)

(53

)

Equity-indexed compensation expense - general and administrative

 

(26

)

(16

)

(20

)

 

(16

)

(14

)

(18

)

Equity earnings in unconsolidated entities

 

23

 

 

 

 

16

 

 

 

Reported segment profit

 

$

323

 

$

300

 

$

610

 

 

$

332

 

$

204

 

$

402

 

Selected items impacting comparability of segment profit (3)

 

18

 

10

 

(49

)

 

21

 

15

 

17

 

Segment profit excluding selected items impacting comparability

 

$

341

 

$

310

 

$

561

 

 

$

353

 

$

219

 

$

419

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Maintenance capital

 

$

55

 

$

18

 

$

9

 

 

$

52

 

$

17

 

$

7

 

 


(1)   Includes intersegment amounts.

(2)   Segment general and administrative expenses (G&A) reflect direct costs attributable to each segment and an allocation of other expenses to the segments. The proportional allocations by segment require judgment by management and are based on the business activities that exist during each period. Includes acquisition-related expenses for the 2012 period.

(3)   Certain non-GAAP financial measures may not be impacted by each of the selected items impacting comparability.

 

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333 Clay Street, Suite 1600

Houston, Texas 77002

713-646-4100 / 800-564-3036

 



 

Page 9

 

PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES

FINANCIAL SUMMARY (unaudited)

 

OPERATING DATA (1)

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

June 30,

 

June 30,

 

 

 

2013

 

2012

 

2013

 

2012

 

 

 

 

 

 

 

 

 

 

 

Transportation activities (average daily volumes in thousands of barrels):

 

 

 

 

 

 

 

 

 

Tariff activities

 

 

 

 

 

 

 

 

 

Crude Oil Pipelines

 

 

 

 

 

 

 

 

 

All American

 

38

 

31

 

39

 

28

 

Bakken Area Systems

 

130

 

135

 

127

 

136

 

Basin / Mesa

 

680

 

707

 

702

 

675

 

Capline

 

158

 

149

 

157

 

136

 

Eagle Ford Area Systems

 

74

 

15

 

61

 

12

 

Line 63 / Line 2000

 

108

 

130

 

113

 

124

 

Manito

 

46

 

57

 

46

 

62

 

Mid-Continent Area Systems

 

255

 

262

 

261

 

242

 

Permian Basin Area Systems

 

548

 

447

 

513

 

451

 

Rainbow

 

125

 

156

 

124

 

149

 

Rangeland

 

56

 

61

 

62

 

62

 

Salt Lake City Area Systems

 

131

 

157

 

133

 

148

 

South Saskatchewan

 

33

 

59

 

46

 

60

 

White Cliffs

 

21

 

17

 

21

 

17

 

Other

 

766

 

743

 

763

 

735

 

NGL Pipelines

 

 

 

 

 

 

 

 

 

Co-Ed

 

51

 

64

 

54

 

32

 

Other

 

165

 

159

 

186

 

79

 

Refined Products Pipelines

 

110

 

118

 

105

 

115

 

Tariff activities total

 

3,495

 

3,467

 

3,513

 

3,263

 

Trucking

 

108

 

96

 

109

 

102

 

Transportation activities total

 

3,603

 

3,563

 

3,622

 

3,365

 

 

 

 

 

 

 

 

 

 

 

Facilities activities (average monthly volumes):

 

 

 

 

 

 

 

 

 

Crude oil, refined products and NGL terminalling and storage
(average monthly capacity in millions of barrels)

 

95

 

93

 

94

 

85

 

Rail load / unload volumes
(average throughput in thousands of barrels per day)

 

231

 

 

223

 

 

Natural gas storage
(average monthly capacity in billions of cubic feet)

 

97

 

80

 

95

 

78

 

NGL fractionation
(average throughput in thousands of barrels per day)

 

90

 

108

 

95

 

60

 

Facilities activities total
(average monthly capacity in millions of barrels)
(2)

 

121

 

109

 

120

 

100

 

 

 

 

 

 

 

 

 

 

 

Supply and Logistics activities (average daily volumes in thousands of barrels):

 

 

 

 

 

 

 

 

 

Crude oil lease gathering purchases

 

853

 

814

 

855

 

806

 

NGL sales

 

160

 

153

 

221

 

144

 

Waterborne cargos

 

7

 

4

 

6

 

2

 

Supply and Logistics activities total

 

1,020

 

971

 

1,082

 

952

 

 


(1)   Volumes associated with acquisitions represent total volumes (attributable to our interest) for the number of days or months we actually owned the assets divided by the number of days or months in the period.

(2)   Facilities total is calculated as the sum of: (i) crude oil, refined products and NGL terminalling and storage capacity; (ii) rail load and unload volumes multiplied by the number of days in the period and divided by the number of months in the period; (iii) natural gas storage capacity divided by 6 to account for the 6:1 mcf of gas to crude Btu equivalent ratio and further divided by 1,000 to convert to monthly volumes in millions; and (iv) NGL fractionation volumes multiplied by the number of days in the period and divided by the number of months in the period.

 

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333 Clay Street, Suite 1600

Houston, Texas 77002

713-646-4100 / 800-564-3036

 



 

Page 10

 

PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES

FINANCIAL SUMMARY (unaudited)

 

COMPUTATION OF BASIC AND DILUTED EARNINGS PER LIMITED PARTNER UNIT

(in millions, except per unit data)

 

 

 

Three Months Ended
June 30,

 

Six Months Ended
June 30,

 

 

 

2013

 

2012

 

2013

 

2012

 

Basic Net Income per Limited Partner Unit:

 

 

 

 

 

 

 

 

 

Net income attributable to Plains

 

$

292

 

$

378

 

$

821

 

$

609

 

Less: General partner’s incentive distribution (1)

 

(91

)

(69

)

(177

)

(134

)

Less: General partner 2% ownership (1)

 

(4

)

(6

)

(13

)

(10

)

Net income available to limited partners

 

197

 

303

 

631

 

465

 

Less: Undistributed earnings allocated and distributions to participating securities (1)

 

(1

)

(2

)

(5

)

(3

)

Net income available to limited partners in accordance with application of the two-class method for MLPs

 

$

196

 

$

301

 

$

626

 

$

462

 

 

 

 

 

 

 

 

 

 

 

Basic weighted average number of limited partner units outstanding

 

340

 

323

 

338

 

319

 

 

 

 

 

 

 

 

 

 

 

Basic net income per limited partner unit

 

$

0.58

 

$

0.93

 

$

1.85

 

$

1.45

 

 

 

 

 

 

 

 

 

 

 

Diluted Net Income per Limited Partner Unit:

 

 

 

 

 

 

 

 

 

Net income attributable to Plains

 

$

292

 

$

378

 

$

821

 

$

609

 

Less: General partner’s incentive distribution (1)

 

(91

)

(69

)

(177

)

(134

)

Less: General partner 2% ownership (1)

 

(4

)

(6

)

(13

)

(10

)

Net income available to limited partners

 

197

 

303

 

631

 

465

 

Less: Undistributed earnings allocated and distributions to participating securities (1)

 

(1

)

(1

)

(3

)

(2

)

Net income available to limited partners in accordance with application of the two-class method for MLPs

 

$

196

 

$

302

 

$

628

 

$

463

 

 

 

 

 

 

 

 

 

 

 

Basic weighted average number of limited partner units outstanding

 

340

 

323

 

338

 

319

 

Effect of dilutive securities: Weighted average LTIP units (2)

 

2

 

3

 

3

 

2

 

Diluted weighted average number of limited partner units outstanding

 

342

 

326

 

341

 

321

 

 

 

 

 

 

 

 

 

 

 

Diluted net income per limited partner unit

 

$

0.57

 

$

0.93

 

$

1.84

 

$

1.44

 

 


(1)   We calculate net income available to limited partners based on the distributions pertaining to the current period’s net income.  After adjusting for the appropriate period’s distributions, the remaining undistributed earnings or excess distributions over earnings, if any, are allocated to the general partner, limited partners and participating securities in accordance with the contractual terms of the partnership agreement and as further prescribed under the two-class method.

(2)   Our Long-term Incentive Plan (“LTIP”) awards that contemplate the issuance of common units are considered dilutive unless (i) vesting occurs only upon the satisfaction of a performance condition and (ii) that performance condition has yet to be satisfied. LTIP awards that are deemed to be dilutive are reduced by a hypothetical unit repurchase based on the remaining unamortized fair value, as prescribed by the treasury stock method in guidance issued by the FASB.

 

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333 Clay Street, Suite 1600

Houston, Texas 77002

713-646-4100 / 800-564-3036

 



 

Page 11

 

PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES

FINANCIAL SUMMARY (unaudited)

 

SELECTED ITEMS IMPACTING COMPARABILITY

(in millions, except per unit data)

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

June 30,

 

June 30,

 

 

 

2013

 

2012

 

2013

 

2012

 

Selected Items Impacting Comparability - Income/(Loss) (1):

 

 

 

 

 

 

 

 

 

Gains/(losses) from derivative activities net of inventory valuation adjustments (2)

 

$

26

 

$

72

 

$

50

 

$

13

 

Equity-indexed compensation expense (3)

 

(16

)

(12

)

(39

)

(38

)

Net gain/(loss) on foreign currency revaluation

 

(4

)

(16

)

4

 

(16

)

Tax effect on selected items impacting comparability

 

(1

)

 

(6

)

 

Significant acquisition-related expenses

 

 

(9

)

 

(13

)

Other (4)

 

 

 

1

 

 

Selected items impacting comparability of net income attributable to Plains

 

$

5

 

$

35

 

$

10

 

$

(54

)

 

 

 

 

 

 

 

 

 

 

Impact to basic net income per limited partner unit

 

$

0.02

 

$

0.11

 

$

0.02

 

$

(0.16

)

Impact to diluted net income per limited partner unit

 

$

0.01

 

$

0.11

 

$

0.02

 

$

(0.17

)

 


(1)   Certain of our non-GAAP financial measures may not be impacted by each of the selected items impacting comparability.

(2)   Includes mark-to-market gains and losses resulting from derivative instruments that are related to underlying activities in future periods or the reversal of mark-to-market gains and losses from the prior period, net of inventory valuation adjustments.

(3)   Equity-indexed compensation expense above excludes the portion of equity-indexed compensation expense represented by grants under LTIP that, pursuant to the terms of the grant, will be settled in cash only and have no impact on diluted units.

(4)   Includes other immaterial selected items impacting comparability, as well as the noncontrolling interests’ portion of selected items.

 

-more-

333 Clay Street, Suite 1600

Houston, Texas 77002

713-646-4100 / 800-564-3036

 



 

Page 12

 

PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES

FINANCIAL SUMMARY (unaudited)

 

COMPUTATION OF ADJUSTED BASIC AND DILUTED EARNINGS PER LIMITED PARTNER UNIT

(in millions, except per unit data)

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

June 30,

 

June 30,

 

 

 

2013

 

2012

 

2013

 

2012

 

Basic Adjusted Net Income per Limited Partner Unit

 

 

 

 

 

 

 

 

 

Net income attributable to Plains

 

$

292

 

$

378

 

$

821

 

$

609

 

Selected items impacting comparability of net income attributable to Plains (1)

 

(5

)

(35

)

(10

)

54

 

Adjusted net income attributable to Plains

 

287

 

343

 

811

 

663

 

Less: General partner’s incentive distribution (2)

 

(91

)

(69

)

(177

)

(134

)

Less: General partner 2% ownership (2)

 

(4

)

(5

)

(13

)

(11

)

Adjusted net income available to limited partners

 

192

 

269

 

621

 

518

 

Less: Undistributed earnings allocated and distributions to participating securities (2)

 

(1

)

(2

)

(4

)

(3

)

Adjusted limited partners’ net income

 

$

191

 

$

267

 

$

617

 

$

515

 

 

 

 

 

 

 

 

 

 

 

Basic weighted average number of limited partner units outstanding

 

340

 

323

 

338

 

319

 

 

 

 

 

 

 

 

 

 

 

Basic adjusted net income per limited partner unit

 

$

0.56

 

$

0.82

 

$

1.83

 

$

1.61

 

 

 

 

 

 

 

 

 

 

 

Diluted Adjusted Net Income per Limited Partner Unit

 

 

 

 

 

 

 

 

 

Net income attributable to Plains

 

$

292

 

$

378

 

$

821

 

$

609

 

Selected items impacting comparability of net income attributable to Plains (1)

 

(5

)

(35

)

(10

)

54

 

Adjusted net income attributable to Plains

 

287

 

343

 

811

 

663

 

Less: General partner’s incentive distribution (2)

 

(91

)

(69

)

(177

)

(134

)

Less: General partner 2% ownership (2)

 

(4

)

(5

)

(13

)

(11

)

Adjusted net income available to limited partners

 

192

 

269

 

621

 

518

 

Less: Undistributed earnings allocated and distributions to participating securities (2)

 

(1

)

(1

)

(3

)

(2

)

Adjusted limited partners’ net income

 

$

191

 

$

268

 

$

618

 

$

516

 

 

 

 

 

 

 

 

 

 

 

Diluted weighted average number of limited partner units outstanding

 

342

 

326

 

341

 

321

 

 

 

 

 

 

 

 

 

 

 

Diluted adjusted net income per limited partner unit

 

$

0.56

 

$

0.82

 

$

1.82

 

$

1.61

 

 


(1)   Certain of our non-GAAP financial measures may not be impacted by each of the selected items impacting comparability.

(2)   We calculate adjusted net income available to limited partners based on the distributions pertaining to the current period’s net income.  After adjusting for the appropriate period’s distributions, the remaining undistributed earnings or excess distributions over earnings, if any, are allocated to the general partner, limited partners and participating securities in accordance with the contractual terms of the partnership agreement and as further prescribed under the two-class method.

 

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333 Clay Street, Suite 1600

Houston, Texas 77002

713-646-4100 / 800-564-3036

 



 

Page 13

 

PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES

FINANCIAL SUMMARY (unaudited)

 

FINANCIAL DATA RECONCILIATIONS

(in millions)

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

June 30,

 

June 30,

 

 

 

2013

 

2012

 

2013

 

2012

 

Net Income to Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”) and Excluding Selected Items Impacting Comparability (“Adjusted EBITDA”) Reconciliations

 

 

 

 

 

 

 

 

 

Net Income

 

$

300

 

$

386

 

$

837

 

$

624

 

Add: Interest expense

 

75

 

75

 

152

 

140

 

Add: Income tax expense

 

18

 

10

 

70

 

30

 

Add: Depreciation and amortization

 

91

 

86

 

173

 

146

 

EBITDA

 

$

484

 

$

557

 

$

1,232

 

$

940

 

Selected items impacting comparability of EBITDA (1)

 

(6

)

(35

)

(15

)

55

 

Adjusted EBITDA

 

$

478

 

$

522

 

$

1,217

 

$

995

 

 


(1)   Certain of our non-GAAP financial measures may not be impacted by each of the selected items impacting comparability.

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

June 30,

 

June 30,

 

 

 

2013

 

2012

 

2013

 

2012

 

Adjusted EBITDA to Implied Distributable Cash Flow (“DCF”)

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

 

$

478

 

$

522

 

$

1,217

 

$

995

 

Interest expense

 

(75

)

(75

)

(152

)

(140

)

Maintenance capital

 

(39

)

(40

)

(82

)

(76

)

Current income tax expense

 

(8

)

(6

)

(53

)

(23

)

Equity earnings in unconsolidated entities, net of distributions

 

(1

)

1

 

(1

)

 

Distributions to noncontrolling interests (1)

 

(13

)

(12

)

(25

)

(24

)

Implied DCF

 

$

342

 

$

390

 

$

904

 

$

732

 

 


(1)    Includes distributions that pertain to the current period’s net income, which are paid in the subsequent period.

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

June 30,

 

June 30,

 

 

 

2013

 

2012

 

2013

 

2012

 

Cash Flow from Operating Activities Reconciliation

 

 

 

 

 

 

 

 

 

EBITDA

 

$

484

 

$

557

 

$

1,232

 

$

940

 

Current income tax expense

 

(8

)

(6

)

(53

)

(23

)

Interest expense

 

(75

)

(75

)

(152

)

(140

)

Net change in assets and liabilities, net of acquisitions

 

(70

)

(466

)

232

 

(489

)

Other items to reconcile to cash flows from operating activities:

 

 

 

 

 

 

 

 

 

Equity-indexed compensation expense

 

27

 

20

 

78

 

60

 

Net cash provided by operating activities

 

$

358

 

$

30

 

$

1,337

 

$

348

 

 

Contacts :

 

Roy I. Lamoreaux

Al Swanson

 

 

Director, Investor Relations

Executive Vice President, CFO

 

 

(713) 646-4222 — (800) 564-3036

(800) 564-3036

 

###

333 Clay Street, Suite 1600

Houston, Texas 77002

713-646-4100 / 800-564-3036